'Today, the CIO is pretty unique in that we see every transaction across the company,' says Rhonda Gass

Montauk, NY – The drive to transform companies with digital capabilities is putting added pressure on chief information officers, who now must track costs in tech-enabled business units outside of IT, from human resources to marketing and sales.

As The Wall Street Journal reported Monday, a growing number of CIOs at some of the world’s largest companies are joining together to set standards and best practices for capturing those costs, while helping non-tech corporate leaders better gauge their value.

Rhonda Gass, CIO of power and hand tool maker Stanley Black & Decker Inc., says today’s IT executives have a unique perspective in the digitized corporate world, since they see nearly every transaction across the company.

Since joining the firm nearly five years ago, she’s adopted an approach to tracking IT costs known as technology business management, or TBM, as the company’s global tech unit evolved from a service-providing “cost center” to a strategic business unit.

The approach sets out standardized terms and common metrics to track tech costs across an enterprise, while gauging the value of tech investments in lines of business beyond IT.

Often, IT is left on the hook for such costs, while the benefits are reaped elsewhere. One of the many challenges of digital-age CIOs is in linking that value chain together.

When I joined the company just under five years ago, each individual business unit had their own IT group. Over the past three years, we’ve pulled that together into one global IT function for the company, in order to build a digital enterprise. That’s where TBM comes in handy. It’s hugely important now to be able to help these units understand where those dollars are going, because they feel like they have less control at times.

Why treat IT as a business, rather than a service?

As everything goes digital, there’s a greater understanding that IT is a significant investment for the company and more than just a cost center. When I started at Stanley Black & Decker, they had a finance team come in of fairly junior folks who supported me by helping us figure out costs and see how we were doing against our annual plan. I now have a CFO for the IT function, who has a team of people around him.

Today, the CIO is pretty unique in that we see every transaction across the company. We see it all. And I think it’s our responsibility, because we see it all, to give better guidance and help to other business-unit leaders in how to get the most value out of those investments.

How do you measure value in IT?

You can measure value in many different ways. There’s a financial return on an investment. On day one of an acquisition, for instance, if I can get all one thousand employees of the acquired company access to our systems, email and HR benefits, to me that’s value.

But I also look at value as transparency, meaning really trying to help business units understand what the services are that we’re providing them, and what the cost of that service is. I don’t necessary think it’s our role to track return on investment for the company, but we can provide structures and tools to help.

In terms of costs, what share should come from maintenance versus innovative new technology?

The goal is always 50-50, but typically as soon as you hit that mark, there’s an acquisition and you quickly see yourself back in the 70-30 range. It’s a constant pendulum swing.